Now at number 3, Snapdeal to buy GoJavas to regain market share

Snapdeal, which lost its number two position to Amazon India recently, is doing everything it can to regain the market share.

To step up its delivery system and supply chain, Snapdeal is planning to fully buy GoJavas, its primary delivery partner.

Presently, Snapdeal holds a minority yet significant stake in GoJavas.

Snapdeal, last year, bought 42 per cent stake in GoJavas, which was valued at Rs 250 crore at that time.

ET quoted sources as saying Snapdeal will likely execute the acquisition through Vulcan Express, its end-to-end logistics unit.

READ ALSO: Vijay Ghadge is the new COO of Snapdeal's Vulcan Express

Last year, Snapdeal COO Rohit Bansal had said the online marketplace had plans to rake in $300million to strengthen its supply chain and logistics infrastructure.

Sources told ET that Go-Javas has been struggling to raise a fresh round of capital, and an acquisition by Snapdeal will be a win-win for both entities. "Snapdeal is dependent on GoJavas as its efficiencies had improved after working with them. Vulcan absorbing GoJavas is a close possibility as the marketplace had invested in the team that built Go-Javas, with Ghadge joining the latter," the second source told ET.

"Ecommerce marketplaces are currently focused on improving their unit metrics and hence might be careful in considering investment in logistics companies," Manish Saigal, managing director at Alvarez and Marsal in India, told ET.

In Feb this year, GoJavas delivered to nearly 300 towns and cities and set a target of increasing the number to 600-800 towns and cities in next one and a half years.

For Snapdeal, the acquisition is quite strategic as it lost its number two post to Amazon India.

Even Amazon is raking in money in its India arm to grasp market share.